A muddy path to modernity

When the Japanese were industrializing, they bought their models off the shelf. They meticulously copied everything from the German Army and the British Navy, including even the patches on the boilers of the steamships they bought. Eastern Europe took a similar imitative line towards American business after the fall of communism, ignoring the closer, perhaps more suitable, Western European models.

Even the old state-controlled Chinese economy was more entrepreneurial than the Soviets, and paid more attention to small commodity production and distribution.

I remember the end of the Cultural Revolution and the condescending smiles of Chinese in the market in Beijing as they watched Aeroflot pilots scooping up matches, soap, tomatoes and other goods that were in perennial short supply back in Moscow.

Even with that history, the efflorescence of entrepreneurship in China under Deng Xiaoping was still breathtaking, but it is interesting to investigate just how much China will follow the American model.

Just before Hurricane Katrina hit New Orleans, I spoke to some Chinese executives from Dalian brought to New York by the Levin Institute at the State University of New York to study how Americans conduct business.

Wang Jun, president of the Dalian Changhai Fengyi Aquatic Co. Ltd. left high school in 1980, just as the reforms were beginning and did a variety of jobs before founding the company, which now has about 400 people supplying seafood and aquaculture products, mainly to the domestic market.

Like most successful Chinese entrepreneurs of his generation, he did not come equipped with an MBA. Only a tiny percentage of Chinese went to university in those days, and management was not featured on the curriculum for those who did.

Wang came to New York to learn techniques to help his business when he returned, and he went to MIT, and to IBM in Albany to see how universities interact with business, because at his level in China, they don't.

Different approaches
Compared with US companies, even those not involved in the IT industry, embracing technology and working with universities, he saw a shortcoming in the Chinese company approach. Since Chinese companies compete on the basis of price, they rarely invest in technology, but with wage levels in China rising, he said, they may have to do so – although not just yet.

He took quite a critical approach to what he saw in the US. He agreed the trip he?d made had challenged many of his managerial assumptions, but he was equally prepared to challenge some of his hosts' perceptions.

Staying on the university campus, the glacial progress of renovation for a nearby dorm bemused him during his six-week stay. It was a world away from the fast construction approach of China. "Delay is not good for the corporate image," he said, showing greater regard for brand building and company reputation than many US companies. "A Chinese company would want to maintain its reputation of reliability," he said.

There are things Americans could learn from China, he suggested quietly – a fairly heretical concept even today. "Chinese have more flexibility than Americans – Americans are focused on revenue, and while that may make more sense for a big corporation, smaller companies need to focus on brand building, market share and so on. They can not do that when they have shareholders on their back." He has shareholders too, he said, but they are more like partners.

Similarly, while many American executives have an almost reflexive theological objection to regulation, Wang said China was making progress on improving regulation – and he approves, since it keeps the playing field level, which is essential as the economy expands.

No iron rice bowls here
American workers were never on the iron rice bowl, whereas China came off it only recently. He sees its vestiges in the expectations of his workers in Dalian, but sees the US model of a thinner safety net for the workers and more flexibility for the company as the target. Even a plastic rice bowl is too much.

After Hurricane Katrina, it has to be doubted just how much a Chinese manager would want to learn from the United States. There have been spectacular disasters across the globe and in China as well, but even most Americans were in shock over how ill-prepared their government and private sector were for a predictable disaster.

They saw evacuation plans that consisted simply of telling poor people to move, but making no provision for transportation or reception, or for the rescue of those stranded. The world's richest country did not conduct itself in a manner likely to encourage emulation. One would have thought that China, after half a century of extolling workers power, would be more inclined towards the European combination of social welfare and capitalism than the American ideal of mini-mal government capitalism.

Ian Williams is a New York-based journalist writing on politics and economics.

China buzz
"China's rise is an entirely new phenomenon unseen in world history. I understand why the western world is feeling so confused about the peaceful rise of China and why you cannot reach a consensus."
Zheng Bijian, the architect of China's peaceful rise' theory, in an interview with the Financial Times

"What I would like to stress here is that China does not pursue a huge trade surplus with the United States and we're willing to work with the United States to take effective measures to increase China's imports from the United States."
Hu Jintao, Chinese President, to George W. Bush, US President

"China hopes to extract and steal America's best industrial technology, then shepherd its own domestic industries into a position where they will one day be able to take market share using America's own technology."
15-page China report released by the office of US Senator Charles Schumer

"In short, as one surveys the globe's pariah regimes, it seems the one thing they all have in common is the same best friend: China."
Ralph A. Cossa, president of the Pacific Forum CSIS, in an International Herald Tribune editorial.

"You have entered unhealthy game time, please go offline immediately to rest. If you do not your health will be damaged and the benefits you can win will be cut to zero."
China's "anti-online game addiction" message to mainland gamers. The statement appears every 15 minutes after a gamer has been playing online for more than five hours

"At present, Russian-Chinese relations reached the highest level in their history… Military-technical cooperation and military interaction proves the level of mutual trust and trusting relations between our peoples and states,"
Vladimir Putin, Russian President

"Should the saving-short, over-extended American consumer falter under the weight of the energy shock — now a distinct possibility … China would be on the leading edge in feeling this impact. Moreover, any slowdown in Chinese exports would ripple quickly through Asia's China-centric supply chain."
Stephen Roach, Chief Economist at Morgan Stanley

"At a time when the American people face the difficulty of a serious natural disaster, the Chinese people stand steadfastly with them."
Hu Jintao, Chinese President

"China has declared its commitment to human rights and has raised expectations for the country to match its growing prosperity with a firm commitment to advancing human rights."
Louise Arbour, UN high commissioner for human rights

"So long as I remain in office, Taiwan is unlikely to recognize China's academic accreditation. This is not for my sake, but rather for the sake of Taiwan, for Taiwan's schools and young people."
Chen Shui-bian, Taiwan President

"Foreign firms are our rivals but they cannot beat us in our breadth of coverage and our links with local governments."
Xu Lingling, Lianhua Supermarket Holdings chief financial officer

"China has largely ignored its poor interior, so it still loses 730,000 children each year. China has also taken diplomatic positions that hurt the world's most vulnerable populations, by supporting Robert Mugabe in Zimbabwe and by implicitly endorsing Sudan's genocide just as it once endorsed Pol Pot's."
Nicholas Kristof, New York Times Columnist

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